When
does attorney review begin?
Attorney
review begins once the Contract is signed by both parties and the
fully executed Contracts are distributed to both parties. It is a
three day period, and weekends do not count. You should make sure
that your realtor immediately faxes the Contract to our office. If
the realtor does not, you should. The attorney review period runs, even
if your attorney has not received the Contract.
Remember, the time period runs from the date the contracts are
signed, not the date that the attorneys receive
the Contract.
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Sellers Information Statement
A form that we refer to as a "Sellers
Information Statement" will be faxed to you from our office as soon
as the contract is received. It is imperative that you complete
this form and fax it back to us immediately.
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What
about the Deposit?
Commonly,
the Buyer will post a deposit of $1,000.00 upon signing the
Contract and the balance of 10% of the Purchase Price will be
posted by the buyer within 10 to
14 days following completion of attorney review. Many Contracts
are drafted with variations involving the amount of the deposit
and the timing of the deposit.
The deposit is typically held by the realtor (usually the selling
realtor), the Seller's attorney, or the Buyer's attorney. Also, due to today’s low
interest rates, the deposits are not usually kept in interest bearing
accounts, unless the realtor places the deposit in an interest
bearing account and the necessary tax forms have been signed by
the parties. It is convention in
New Jersey
that if the funds are placed in an interest bearing account, that
the interest be split equally between the Buyer and Seller.
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What Certificate do I need to Close
Certificate of Ocupancy
You
need to check with the municipality in which your home is located.
Some municipalities require that the Seller obtain a Certificate
of Occupancy prior to closing and some do not.
Some municipalities have unique requirements. For example,
Maplewood
requires that the Buyer, not the Seller, obtain the Certificate of
Occupancy. Also, Bernards Township requires a "CRC" in order to close. That document certifies that all building permits that have been "opened" by the seller have been "closed". All municipalities require that the Seller obtain a
Certificate of Occupancy in the case of new construction. You do
not want to wait until the last minute to obtain a Certificate of
Occupancy, because the municipality may require that you make
certain repairs to the home before the Certificate of Occupancy is
issued. This will probably require a re-inspection, and may take
time. You cannot close without a Certificate of Occupancy, if it
is required by the municipality.
While conducting the inspection for the Certificate of Occupancy,
the inspector may discover that you have performed improvements to
the home without having obtained the necessary permits or
approvals. You may at that juncture be required to apply for
permits and approvals. This could be time consuming and expensive.
Smoke Detector Certificate
New
Jersey
State
law mandates that when you sell your home you must obtain a smoke
detector certificate. This must be obtained whether or not your
municipality requires the issuance of a Certificate of Occupancy.
In most municipalities you must schedule an appointment with the
fire code official to inspect your home to determine that you have
the requisite number of smoke detectors and that they all work. These appointments cannot be scheduled at the last
minute. We strongly suggest that you schedule the appointment as
soon as attorney review is completed. The Firm will not close your
transaction if a smoke detector certificate has not been obtained,
since it is against the law to close without it. Also, check to
see how long the smoke detector certificate is valid. If the
closing is delayed, you may have to reapply and obtain a new
certificate.
Carbon Monoxide Certificate
New Jersey state law also requires that you obtain a carbon
monoxide detector certificate. Like the smoke detector certificate, the carbon monoxide detector certificate is administered at the municipal level. All of the comments made regarding the issuance of a smoke detector certificate apply to the issuance of a carbon monoxide detector certificate as well.
Fire Extinguisher Law
Effective, November, 2005, New Jersey Sate law requires that at least one portable fire extinguisher, rated for residential use and no larger than ten pounds, be mounted within ten feet of the kitchen area and not more than five feet above the floor. Like the smoke detector certificate and carbon monoxide detector certificate, this law is administered at the municipal level.
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Title
and Survey?
The
Buyer’s attorney will order the title search and the survey, and
the Buyer will pay for those. However, you should try to
provide us with a copy of the title policy and survey you obtained
when you purchased your home. We will in turn provide the Buyer's
attorney with copies of the title and survey. This will speed up
the title search, and will also help in resolving certain title
problems that might arise. If you have a recent survey, the Buyer
may try to avoid the cost of a new survey and may request that you sign a Survey Affidavit. That is an Affidavit that states that
there have been no exterior changes to the dwelling or to the
property. If your survey is not current, the Buyer may not be able
to use it, depending upon the requirements of the chosen lender.
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Will
we close on the closing date set forth in the Contract?
The
closing date in the Contract is a target date only. There is no guaranty that your closing will occur on the exact date set forth
in the Contract. Likewise, the exact time of the closing is
usually established a day or two before the closing.
In
all cases, the Seller must move out before the closing and the
home must be delivered to the Buyer, broom clean and free of all
possessions. If you have not moved out by the closing, you run the
risk that the closing will be delayed. We strongly suggest that
you move out of the home the day before the closing even if it
means that your household goods must be stored on a truck
overnight.
We also suggest that you make an appointment with our
office prior to the closing, to pre-sign all of the closing
documents. We will then be able to attend the closing on your
behalf without inconveniencing you. You can then either pick up
the closing proceeds or we can send them to you. Of course, you
will need to be available by telephone in the event that questions
arise during the closing.
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What do I do with
the utilities?
The
utilities should be switched to the Buyer's name as of the closing.
The realtor can assist or guide you in this process. Do not turn off the utilities completely, because the Buyer has the right to test the water and electricity at the walk-through inspection and if services have been turned off, this will not be possible and will delay the closing
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I prepaid the real estate taxes and/or sewer charges. What do I do?
When
the tax and sewer searches are obtained, the Buyer's attorney will
see that you either pre-paid for these items ( in which case the
credit will likely be in your favor), or that you did not pay for
the current period (in which case the credit will probably be in
favor of the Buyer). We suggest that if payments are made for real
estate taxes and/or sewer, they be made well in advance of the
closing. Do not make any payments within a 3 week period prior to
closing, but do make sure that all payments are made in a timely
manner to avoid the imposition of interest or late penalties. If
you make payments shortly prior to closing, you
run the risk that they will not be posted in a timely manner, and
that you will not receive the appropriate credit.
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Since
closing is coming up, should I pay the mortgage?
With
regard to the payment of your current mortgage the general rule is
as follows (assuming that your current mortgage imposes a penalty
if the payment is not received by the 15th of the
month):
a.
If you close prior to the 12th of the
month, you do not need to make your monthly mortgage payment.
b.
If you close after the 12th of the month,
you must make your monthly mortgage payment if you wish to avoid
the imposition of a late fee.
You need to watch this because if the closing is delayed and you have not paid the mortgage payment that is due, you, not the buyer, will be responsible for late penalties.
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What
happens with my existing mortgage?
The
Buyer's attorney will obtain a pay-off statement indicating the
amount due on your current mortgage as of the closing date. The
appropriate sum will be deducted from the closing proceeds and a
check in an amount sufficient to pay off the mortgage will be sent
by overnight delivery directly to your lender.
The Buyer’s attorney will likely
charge you a nominal fee for overnight delivery and a small fee
for filing a discharge of that mortgage.
Should you receive a notice from your lender after the closing
indicating that your loan is overdue or not paid off, please
contact our office immediately.
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What
happens to my line of credit?
If you have a home
equity line of credit that is secured by the home that you are
selling, that line needs to be closed. If there is any money
due on the loan that will have to be paid off at closing like any
other mortgage. Once a contract of sale is signed, you should not
make any draws against this line of credit, and certainly do not make any draws after the closing.
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When
do I cancel my insurance?
Do
not cancel the homeowner's insurance until you have confirmed with
our office that the closing has been completed.
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At closing, the Seller is required to sign a Certificate regarding their New Jersey residency status. Why?
Effective August 1, 2004, the Gross Income Tax Act requires nonresidents of New Jersey who derive income from the sale of real property in this State to pay estimated gross income tax. The Deed will not be recorded unless this Certificate is submitted and/or the proper estimated gross income tax has been paid. The Seller may be subject to withholding under this Act. We urge all Sellers to familiarize themselves with the Certificate prior to closing and to alert us if they are considered a non-resident of the State of New Jersey. The certifications that you will be asked to sign are on this website. This Firm does not give tax advice with respect to this Act. If you have any questions with regard to the Act’s applicability, please consult your tax professional.
· GIT/REP-1 - Nonresident Seller's Tax Declaration
· GIT/REP-3 - Seller's Residency Certification/Exemption
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